Sunday, September 20, 2015

PROF. JEFFREY SONNENFELD: Yes, Trump Was Right, Carly Fiorina Was One of the Worst CEOs of All-Time

A Dean at Yale Business School, Jeffrey Sonnenfeld was surprised to hear his name come up not once, but twice, at CNN's GOP debate. Donald Trump noted Fiorina's abysmal track record as a CEO at Lucent and HP, citing Sonnenfeld's authorship, which was not rooted in any political affiliation.

As Fiorina admits, I have been critical of her for over a decade—long before she announced her political aspirations. I have studied her business record, challenged her leadership abilities and have come to agree with the assessment that she was one of the worst technology CEOs in history...

...It was Fiorina’s failed leadership that brought her company down. After an unsuccessful attempt to catch up to IBM’s growth in IT services by buying PricewaterhouseCooper’s consulting business (PwC, ironically, ended up going to IBM instead), she abruptly abandoned the strategic goal of expanding IT services and consulting and moved into heavy metal. At a time that devices had become a low margin commodity business, Fiorina bought for $25 billion the dying Compaq computer company, which was composed of other failed businesses. Unsurprisingly, the Compaq deal never generated the profits Fiorina hoped for, and HP’s stock price fell by half. The only stock pop under Fiorina’s reign was the 7 percent jump the moment she was fired following a unanimous board vote. After the firing, HP shuttered or sold virtually all Fiorina had bought.

...During Fiorina’s tenure, thanks to the Compaq deal, profits fell, employees were laid off and value plummeted. Fiorina was paid over $100 million for this accomplishment...

...At the time, most industry analysts, HP shareholders, HP employees and even some HP board members resisted the Compaq deal. (Fiorina prevailed in the proxy battle, with 51.4 percent, partly thanks to ethically questionable tactics, but that’s another story.) But rather than listen to the concerns of her opponents, she ridiculed them, equating dissent with disloyalty. As we saw during the debate when she attacked me, rather than listen to or learn from critics, Fiorina disparages them. She did so regularly to platoons of her own top lieutenants and even her board of directors—until they fired her.